NRB to scrap approval requirement for foreign payments, Allows content creators to retain earnings in dollar accounts

KATHMANDU: In a major liberalization of Nepal’s foreign exchange regime, Nepal Rastra Bank is set to remove the mandatory approval requirement for outward foreign currency payments related to service imports, while also allowing digital content creators to retain a portion of their earnings in dollar accounts.

Banks to Handle Foreign Payments Directly

Under the proposed policy shift, commercial banks will be authorized to process foreign payments for service imports without requiring prior approval from the central bank. This marks a significant departure from the existing system, where payments—ranging from film imports to international education services (except those from India)—require NRB clearance.

NRB Governor Bishwanath Paudel said the move is aimed at improving efficiency and reducing bureaucratic delays.

“Routine processes were unnecessarily burdening NRB’s human resources. Allowing banks to handle these transactions will make the system faster and more efficient,” he said.

Service importers will still need to submit standard documentation to banks, including company registration certificates, tax clearance documents, audited financials, invoices, and contracts where applicable. Regulatory recommendations will also be required for sectors such as aviation, where entities like the Civil Aviation Authority of Nepal must provide approvals.

Officials indicate that the internal groundwork has been completed, and the formal policy announcement is expected within days.

Boost for Ease of Doing Business

The reform is expected to eliminate procedural delays, enhance ease of doing business, and decentralize operational authority from the central bank to commercial banks—aligning Nepal’s practices with more flexible international standards.

A senior source noted that the change will “remove one layer of delay,” benefiting both businesses and regulators.

Content Creators to Benefit from Dollar Retention Policy

In a parallel move, NRB is introducing a flexible policy for digital content creators earning through platforms like YouTube and Facebook. Under the new provision, creators will be allowed to retain up to 50 percent of their earnings in dollar accounts.

Currently, such earnings are fully converted into Nepali rupees after a 1 percent tax deduction introduced in the fiscal year 2021/22. The new policy will allow creators to hold part of their income in foreign currency, enhancing their financial flexibility.

The central bank says the move is designed to encourage international spending, including travel and online purchases, while also allowing individuals to benefit directly from Nepal’s strong foreign exchange reserves.

Policy Backed by Strong Forex Position

Officials emphasized that Nepal’s current foreign exchange reserves remain at comfortable levels, providing space for such liberalization measures without immediate risk to macroeconomic stability.

“People should be able to use the money they earn. With strong reserves, it’s time to extend that benefit to citizens,” a senior official said.

The dual policy shift signals a broader transformation in Nepal’s foreign exchange management approach—balancing regulatory oversight with efficiency and user convenience. For businesses, the removal of NRB approval is expected to accelerate international transactions, while for the growing digital economy, the dollar retention facility could incentivize content creation and global earnings.

Market observers view the reforms as part of a gradual but strategic opening of Nepal’s financial system, aimed at fostering competitiveness, reducing administrative friction, and supporting emerging income streams in the digital era.